The start of Labour’s tenure in government has seen the party choose not to progress both the social care charging reform and the training and development fund.

Off the back of a difficult few weeks for the sector, Finn Turner-Berry, policy, research and projects officer at the National Care Forum, looks at how Fair Pay Agreements might work and makes the case for decisive action and collaboration with social care.

It is no secret that there is a workforce crisis in adult social care.

With 131,000 unfilled posts and a turnover rate of 25.8%, the sector is struggling to recruit and retain enough people to meet growing levels of demand. This is not good for the people we support, their families, our remaining staff or the sustainability of provider organisations.

Pay really matters. Skills for Care’s ‘Pay in the Adult Social Care Sector Report found that 41% of care workers earn below the Real Living Wage (as at December 2023). Skills for Care’s State of Care 2024 report also found 80% of jobs in England pay more than the median rate of pay for independent sector care workers. We know that low pay contributes to the chronic staffing problems we see in the sector and levels of poverty amongst the workforce – one in five care workers live below the poverty line.

Beyond the issues of low pay, the sector has come together in the recently launched A Workforce Strategy for Adult Social Care in England to advise government on the workforce policy levers available in addition to improving care worker pay; the 70+ recommendations include clear career pathways, guaranteeing job security and flexibility, and beefing up learning and development opportunities and are all geared to resolving the staffing crisis.

These are all policies that, if implemented, could improve the crisis that social care is facing. In light of this, the recent announcements scaling back commitments around the funding available for learning and development funding were a bitter blow, and a joint open letter was published in July registering concern with the new government’s decisions on funding. The National Care Forum was one of the 30 plus organisations from across the sector that signed and endorsed this letter.

Clearly, we are operating in a hugely challenging economic market. However, choosing not to progress both charging reform and the training and development fund has ratcheted up concern about the introduction of fair pay agreements in care, in particular, the funding that will be essential to implement the policy effectively. Labour’s choice to frame Fair Pay Agreements (FPAs) as their flagship social care policy means that they need to work with the sector to shape and resource implementation of this policy.

This concern merits a closer look at how FPAs might work.

FPAs are basically a form of collective bargaining, which is the official process through which trade unions represent workers and negotiate anything from an improved pay offer to better working conditions and pensions. Key actors in this are trade unions and employers’ associations.

What can we learn from the experience of others? New Zealand’s Fair Pay Agreement Act established FPAs as targeted sectoral collective agreements, in which trade unions and employer representatives negotiate and set minimum terms and conditions for all in a sector (union membership or not). This could be well suited to social care in an English context, a sector that has low levels of unionisation in comparison to other sectors such as health and manufacturing.

In an attempt to deter employers from paying unfairly in New Zealand, when FPA terms were agreed they were then made secondary legislation and enforced by the government. This meant that any breaches by employers would be considered a breach of law as opposed to a contract. This could give government more teeth when it comes to holding problematic employers to account.

It is, however, important to note that in New Zealand FPA legislation did not last long. After being passed in 2022, it was promptly repealed by the National party-led government which took power in October 2023. After a year, FPAs in New Zealand became defunct, and only one sector managed to make progress towards an agreement.

So, how could an FPA work here? Readers will quite rightly observe that the sector does not currently have sectoral bargaining infrastructure sufficiently equipped and resourced to support a rigorous collective bargaining role on behalf of such a large, complex workforce.

The scale and complexity of the social care sector should not be underestimated by the new Labour government. 1.6 million people work in adult social care in England working across over 18,000 (nearly all independent) organisations. Social care providers deliver care in a range of settings and a variety of models of care, from residential care settings for older people to supported living settings for working age adults with a learning disability and everything in between.

This diversity and breadth may prove to be the biggest barrier for the new government’s plans – establishing an employer association that appropriately represents the whole sector will be a challenge in itself. And funding to employers to honour the FPA that is reached will be essential if it is to be implemented in a meaningful and sustainable way.

So, are there any other solutions to the fair pay problem that might be simpler? Might a pay review body be the answer? To date, they have predominantly functioned in the public sector, and it is not clear how the model would translate to a social care context. Also, as demonstrated by recent industrial action, pay review bodies for the NHS and the wider public sector have faced significant challenges in England.

The expert thinktanks have some ideas; the Nuffield Trust and the Health Foundation investigated the different policy options for improving care worker pay and they put forward five options from national minimum wage to pay review bodies. In essence, what matters most for the success of improving pay is political will, action, and resources to back it.

Regardless of the approach to Fair Pay the government develops one thing is clear:  additional national funding for better wages will be essential if improved pay for care workers is to be realised.

Wider action on workforce development, career pathways, and being future ready is also sorely needed, but with plenty of time and plenty of political capital, the government has a real opportunity to improve care worker pay.

Taking decisive action on pay would transform hundreds of thousands of lives for care workers across England and as a sector we stand ready to help the government achieve their mission to improve care workers pay.